Articles Posted in Estate Planning

By Lane V. Erickson, Attorney

I’ve seen countless clients breathe a sigh of relief once they have completed their Estate Planning. It’s almost as if a physical weight has been lifted from their shoulders. I understand why my clients feel this way. For those who have never done it, Estate Planning can seem like an insurmountable mountain that has to be climbed. I enjoy my job of guiding my clients through this process in a way that is both pleasant and easy. To take the fear and mystery out of Estate Planning, here is a checklist of the 4 types of Estate Planning Documents that every person should have. Having this checklist should help you and your family start a conversation about getting both your and their Estate Planning done.

1. Estate Planning Documents

By Lane V. Erickson, Attorney

Estate planning involves not only tangible assets such as houses, cars, and similar things. It also includes any intangible assets you own. What are intangible assets? These include things that you can’t physically touch, but that have value. For example, we live in a digital age which means that most of us have online “accounts”, such as YouTube, Facebook, Instagram, LinkedIn, or Twitter. We may also have online money accounts such as PayPal, peer to peer lending, or investment and retirement accounts. While having such assets is convenient, the problem is that under present law, it is not entirely clear who can access and manage your online assets when you die.

The estate planning laws in most states have not kept pace with technology. Additionally, many of the companies responsible for managing digital assets are concerned about violating applicable laws. These companies are also fiercely protective of their users’ privacy. Additionally, many states are working on legislation that could help protect yourself and your digital assets.

By Lane V. Erickson, Attorney

Society is consumer driven. Home mortgages, student loans, car loans, credit cards and other debt are a normal part of society and our lives. I am often asked by my clients about what happens to their debt when they die. In most circumstances, I have to deliver the bad news that debt usually does not die with the debtor. The general rule in Idaho is that if you have debts when you die your Personal Representative may have to liquidate your assets (including homes, cars, and other assets) to pay your debts before anything is passed on to your loved ones. Here are 4 things you should know about debt and death:

1. Death and Credit Cards. If a loved one leaves behind thousands of dollars in debt on credit cards, you probably have nothing to worry about, unless you are a co-signer on that card. When this occurs you have a financial loss on top of an emotional one.

Recently I represented individuals in a family that became disgruntle with their sibling who was named as the personal representative of their parents’ Wills. The individuals believed that the personal representative was mismanaging the estate. The parties decided to litigate the matter and ended up spending more money on their attorneys than what they were fighting about in the first place.

These conflicts may have been avoided with proper planning. When preparing your estate plan, there are certain things that you can do to help reduce the chance of conflicts among the beneficiaries named in your Will, most often your children. The following is a list of things you can do to try and eliminate potential conflicts:

1. Communication. Communicating your intention with your beneficiaries while you are alive can be difficult and may result in some minor conflicts, but in the long run can prevent unnecessary litigation after your death. It is important that you inform your beneficiaries of the existence of a Will, and that you let them know each and every time you change or modify the Will.

There are 4 reasons every person should prepare a written Will. 　A Will empowers you to direct your affairs after your death. A Will allows you to give specific property to your family and friends. Even those of us with little or no property will want to designate a guardian for your minor children. Finally, a written Will simply makes things as easy as possible for your family.

1. Directing Your Affairs After Your Death

Friends and family are well meaning most of the time. Sometimes they are not. Regardless, when we die, we either leave directions about our affairs in a written Will or we simply leave these things in the hands of our family and friends. What are your “affairs”? These would be things such as, do you want a funeral or not. Do you want to be cremated, and if so, are your ashes to be buried or scattered in a place you chose? Additionally, in a written Will you can provide direction about how to handle your debts or bills, your property, and your other business or personal affairs. If you don’t provide direction in a written Will, then what you want simply may not happen.

I had a recent case where an individual obtained a divorce from his wife, but did not remove her as primary beneficiary of his life insurance policy. The man’s Will stated that everything should go to his children. When the man passed away, the issue arose, “Who gets the life insurance proceeds?”

In general, a life insurance policy is a contractual relationship between an individual and the insurance company. Upon the death of the individual, the insurance company is under a duty to distribute the proceeds of the policy to the name beneficiaries regardless of what the individual’s Will states. Thus, in the above scenario, under the contractual relationship, the ex-wife could argue that she is entitled to the life insurance proceeds.

Fortunately, some states have laws to prevent an ex-wife from inheriting under a life insurance policy by automatically revoking the ex-spouse’s beneficiary designation upon the divorce being final. But, revoking the ex-spouse’s beneficiary designation may require judicial action which can be costly. Moreover, these laws only apply to ex-spouses and do not protect against other individuals that you may have wished to remove as a designated beneficiary.

Losing a loved one is difficult. Grieving with your loss while trying to navigate the probate process alone is more than most people can cope with. As a result, most people hire an attorney to help them complete a probate. Probate is the name given to the process of collecting and managing the assets; debts or taxes; and distributions of property of a person who has died. Once you found an attorney to help you through the probate process, there are 5 things you can do to prepare for your first meeting.

First, order and receive eight to ten (8-10) certified copies of the death certificate. Death certificates are used in planning and carrying out the probate process in many ways from providing a copy to the Court to forwarding copies to account holders and life insurance providers. If possible, bring at least one certified copy of the death certificate to your first meeting with your probate attorney.

Second, determine if there is an existing written Will, or written Estate Plan. Finding the original documents and providing these documents to your probate attorney will help in the determination of whether probate is required or not. For instance, if there is a trust, probate might not be necessary. If probate is necessary, many states require that the original will be filed with the Court during the probate process. Locating and bringing this to your probate attorney will avoid delays.

Most clients I work with on their Estate Planning are shocked to learn that everyone has an Estate Plan, even when they have done nothing. There really are no exceptions to this. In Idaho, like most every other state, written statutes create a default Estate Plan for anyone who has not created one for themselves.

While this may seem intrusive, the reason the government has a default Estate Plan for you is because the law recognizes that when a person passes away, many people may make a claim to the decedent’s property. To avoid the potential chaos that could result from this problem, and to stop those that are unscrupulous, the law has created a systematic default Estate Plan for the distribution of a person’s belongings when they die. This is called the Law of Intestacy.

Essentially, if you die without a written Will, or Estate Plan, you die “Intestate.” If you don’t have a written Will as part of your Estate Plan then Idaho’s “intestacy” statutes and laws will automatically create an Estate Plan for you that determines who will receive your property when you die. In other words, if you don’t create an Estate Plan for yourself, the government has a default plan for you.